Tanzania: Pay as you drive fee, ‘fair for all’

Economists and political analysts who spoke to the ‘Daily News on Saturday’ said the new system brings every ‘mwananchi’ on the taxman’s book and that it is a fair way of contributing to the country’s economic development.

Tanzania: Pay as you drive fee, ‘fair for all’

Economists and political analysts who spoke to the ‘Daily News on Saturday’ said the new system brings every ‘mwananchi’ on the taxman’s book and that it is a fair way of contributing to the country’s economic development.

10 June 2017 Saturday 15:20

THE slashing of motor vehicle licence fees and hiking of excise duty on petrol, diesel and kerosene by 40/- per litre has been interpreted as government’s smartest way of easily getting tax in a fair and acceptable manner in Tanzania.

Economists and political analysts who spoke to the ‘Daily News on Saturday’ said the new system brings every ‘mwananchi’ on the taxman’s book and that it is a fair way of contributing to the country’s economic development.

An analysis by the ‘Daily News on Saturday’ agrees on the fact that the new announced system is fair for all Tanzanians as compared to the previous system, which forced motor vehicle owners to pay licence fees regardless whether their vehicles were operating or not.

The new system, according to the Minister for Finance and Planning, Dr Philip Mpango, will involve only motor vehicles that are operating.

In other words, the motor vehicle licence fee is now a ‘pay as you drive fee’, thus motorists will be paying according to the amount of litres of fuel that is consumed by their vehicles. However, the budget looks friendly to motorists since the amount of money that is expected to be paid is smaller than the one they used to pay annually.

A motorist who spoke to the ‘Daily News on Saturday,’ Mr Sabinus Izigo, said his vehicle consumes at least six litres of petrol every day. This means six litres will be charged a total of 240/- everyday as tax, which amounts to 7,200/- a month. Therefore annually, Mr Izigo will be paying a total of 86,400/-.

“My vehicle has an engine capacity of 1,990. I used to pay a motor vehicle licence fee of 230,000/- annually. But with this new system, I will be paying less than 100,000/-, which is fair for me,” he said. According to a survey by the ‘Daily

News on Saturday,’ majority of motorists in Dar es Salaam use between 150 and 200 litres of fuel a month. Therefore, regardless of their vehicle engine sizes they are subjected to pay between 6,000/- and 8,000/- a month, which is between 72,000/- and 96,000/- annually.

Prof Semboja Haji from the Economics Department of the University of Dar es Salaam said there are no losers and winners when it comes to issues of national interests. He said the government’s move must be commended because it is fair and economically acceptable.

“The government represents the interests of all ‘wananchi,’ I think youth who were born and found good roads and storey buildings must ask themselves who built those structures. It means there was a time when some people toiled to make life better, and it is like this,” he said.

Prof Semboja said the new system is of huge advantage to both the government and the public at large. He said the government has decided to use an alternative method to collect tax without disturbing anybody.

“TRA will no longer waste time chasing people whose vehicles are already out of use. This means the day you move your vehicle outside your gate, you start paying tax on the spot,” he said. According to Prof Semboja, the government has decided to be creative and come up with a system that makes every person to pay tax.

“When you board a bus to Morogoro, it means whoever is in the bus is paying tax because you are all contributing for fuel, this is good and fair,” he said.

The economist added that the new system allows the government to get its cash whenever it makes changes on tax rates. “If it happens that the government increases or reduces the rate of tax, it gets its money within a short time because things change overnight, unlike before,” he said.

University of Dodoma lecturer, Paul Loisulie said the slashing of motor vehicles licence fees and increase of excise duty on petroleum products by 40/- will increase government revenues because people will no longer escape from paying the said tax.

“It is in records that some people were collaborating with some few dishonest TRA officials to get fake motor vehicle licence stickers and other things of such nature, but with this new system, everybody who wishes to use a motorcycle will pay tax,” he said.

He added that all Tanzanians are also going to pay tax because almost every sector uses petroleum products, and thus in one way or another every mwananchi will participate fully in the building of the country’s economy.

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